Sensex 450 pts lower at 77,100; Nifty at 23,400; IT, Oil, PSB weigh

Indian benchmark equity indices BSE Sensex and Nifty 50 were trading lower on Monday, amid mixed global cues.

At 11 AM, the BSE Sensex was down 437 points, or 0.56 per cent, at 77,142, while the Nifty 50 was at 23,413, down 119 points, or 0.51 per cent.

More than half the stocks on the BSE Sensex were trading in the green, with gains led by Larsen & Toubro (up 0.99 per cent), followed by Tata Steel, HDFC Bank, Titan, and Bajaj Finance, while losses were capped by Infosys (down 1.79 per cent), followed by Axis Bank, IndusInd Bank, Maruti Suzuki India, and UltraTech Cement Co.

On the Nifty 50, 3 stocks were trading in the green, while the rest declined. Gains were led by Hero MotoCo (up 2.99 per cent), followed by Hindalco Industries, BEL, NTPC, and Coal India, while losses were led by Infosys (down 1.99 per cent), followed by

Dr Reddy, Grasim Industries, Britannia Industries and Axis Bank.

Across sectors, the IT index was the top drag, falling 1.29 per cent. The FMCG, Media, Pharma, PSU Bank, Healthcare and Oil indices were also trading with cuts. In contrast, the Metal and Realty indices were the top sectoral gainers, climbing 1.66 per cent and 1.16 per cent, respectively.

Nifty Bank, Financial Services, Auto, and Consumer Durables indices were trading with gains.

In the broader markets, meanwhile, the Nifty Midcap 100 was marginally higher by 0.08 per cent, while the Nifty Smallcap 100 was down by 0.09 per cent.

India’s risk gauge, the India VIX index was 8.17 per cent higher.

Markets were expected to remain cautious on Monday, after a recent spate of data points indicated a strengthening US economy before Donald Trump’s inauguration, and Federal Reserve chair Jerome Powell said that the central bank is in no rush to cut interest rates.

Benchmark equity indices BSE Sensex and Nifty50 ended the week’s last trading session in the negative territory on Friday. The BSE Sensex shed 110.64 points or 0.14 per cent to settle at 77,580.31. Similarly, NSE Nifty50 ended at 23,532.70, down 26.35 points or 0.11 per cent from its previous close.

In the broader markets, Smallcap stocks led gains as the Nifty Smallcap100 index rose 0.81 per cent. The Nifty Midcap100 index followed the gains, settling higher by 0.55 per cent. Among the sectoral indices, Nifty Auto, Realty, Media, Healthcare and Financial sectors gained, while FMCG, PSU Bank, Pharma, Select Healthcare and OMCs indices declined on Thursday.

That apart, higher inflation and shrinking consumer purchasing power appear to have taken a bite out of consumption-related stocks, with many seeing a decline in recent months. READ MORE

Two of the largecap-oriented mutual fund (MF) offerings — flexicap and largecap funds — have witnessed a spike in investor interest in October amid a fall in the equity market. Both the categories logged their all-time-high inflows last month. READ MORE

In another news, global brokerage firm CLSA has reversed its tactical overweight on China while raising its exposure to a 20 per cent overweight on India. READ MORE

Markets in the Asia Pacific region were higher on Monday morning.

South Korea’s Kospi was ahead by 2.24 per cent, and the small-cap Kosdaq climbed 1.38 per cent. Japan’s Nikkei 225 was lower by 0.78 per cent, and the broad-based Topix was down 0.52 per cent.

Australia’s S&P/ASX 200 was trading close to the flatline with a positive bias, while Hong Kong’s Hang Seng index was ahead by 1.8 per cent. Mainland China’s CSI 300 climbed 0.29 per cent, and the Shanghai Composite climbed 1.54 per cent.

Apart from that, a gauge of global stocks was set for its biggest weekly drop in two months and the 10-year US Treasury yield hit its highest level in 5-1/2 months on Friday as economic data and comments from Federal Reserve officials suggested a slower pace of interest-rate cuts ahead.

Fed Chair Jerome Powell said on Thursday the central bank did not need to rush to lower interest rates due to ongoing economic growth, a solid job market and inflation that remains above its 2 per cent target.

The US Commerce Department reported on Friday that retail sales rose 0.4 per cent last month after an upwardly revised 0.8 per cent advance in September. The growth topped the 0.3 per cent rise expected by economists polled by Reuters, after a previously reported 0.4 per cent gain in September.

In addition, the Labor Department said on Friday that import prices unexpectedly rose 0.3 per cent last month after an unrevised 0.4 per cent decline in September amid higher prices for fuels and other goods. Analysts had expected a decline of 0.1 per cent.

Equities had rallied after the US presidential election, as investors gravitated toward assets expected to benefit from President-elect Donald Trump’s policies in his second term after he pledged to impose higher tariffs on imports, reduce taxes and loosen government regulations.

But the gains have fizzled in recent days as markets try to calibrate the Fed’s rate-cut trajectory and any legislative policy changes.

On Wall Street, the Dow Jones Industrial Average fell 305.87 points, or 0.70 per cent, to 43,444.99, the S&P 500 fell 78.55 points, or 1.32 per cent, to 5,870.62 and the Nasdaq Composite fell 427.53 points, or 2.24 per cent, to 18,680.12. Each of the three major indexes closed at record highs on Monday.

For the week, the S&P 500 fell 2.08 per cent, the Nasdaq declined 3.15 per cent, and the Dow lost 1.24 per cent.

Other Fed officials made comments on Friday that also clouded the picture on the timing and magnitude of more rate cuts.

MSCI’s gauge of stocks across the globe slumped 8.53 points, or 1.00 per cent, to 842.67. It was on track for its fourth-straight

decline and biggest weekly percentage decline since early September, around 2.4 per cent.

In Europe, the STOXX 600 index closed down 0.77 per cent but eked out a small weekly gain, its first in four weeks.

Bond yields and the dollar have surged not just on growth prospects but also on concerns that Trump’s policies may rekindle inflation after a long battle against price pressures following the pandemic. In addition, tariffs could lead to increased government borrowing, further ballooning the fiscal deficit and potentially causing the Fed to alter its course of monetary-policy easing.

The dollar index, which tracks the US currency against peers including the euro and Japan’s yen, was 0.12 per cent lower on the day to 106.75 with the euro off 0.02 per cent at $1.0528.

Expectations for a 25-basis-point cut at the Fed’s December meeting stood at 58.4 per cent on Friday, down from 72.2 per cent in the prior session, and 85.5 per cent a month ago, according to CME’s FedWatch Tool.

The yield on benchmark US 10-year notes rose 1.9 basis points to 4.439 per cent after earlier reaching 4.505 per cent, its highest level since May 31. The yield is up about 13 bps this week and is set for its eighth weekly rise in the past nine.

US crude settled down 2.45 per cent to $67.02 a barrel and Brent fell to settle at $71.04 per barrel, down 2.09 per cent on the day, as investors digested a slower Fed rate-cut path and waning Chinese demand.